Yahoo fights the French

Federal appeals court grants new hearing on sales of Nazi gear on Yahoo.
February 10, 2005
Yahoo doesn¹t have to kick Nazi paraphernalia off its site just yet. The
U.S. Ninth Circuit Court of Appeals on Thursday agreed to reconsider a
ruling stemming from a French lawsuit that barred the company from allowing
Nazi memorabilia on its web site. The court didn¹t make a ruling on the
merits of the case on Thursday, but said that an 11-judge panel should
review an earlier decision made by three judges.

The ruling could determine the extent to which U.S. Internet companies with
multinational operations are bound by foreign law.

In August, the court had reversed a District Court¹s decision favoring Yahoo
over the groups asking it to abide by French law in the United States. The
District Court had said the French ruling wasn¹t enforceable in the U.S.,
but Judge Warren Ferguson wrote, in the majority opinion, that the District
Court stepped out of its jurisdiction by hearing the case at all.

Thursday¹s decision was a response to Yahoo¹s appeal to overturn the August
ruling.

Yahoo has been embroiled in this case for more than four years. In 2000, two
French groups‹La Ligue Internationale Contre Le Racisme et L¹Antisemitisme
(LICRA) and L¹Union des Etudiants Juifs de France (UEJF)‹sued Yahoo in a
French court, arguing that the Nazi-related postings, images, and
memorabilia on its web site violated French law. The French Criminal Code
bans the exhibition of Nazi propaganda for sale and forbids French citizens
from possessing them. 
 
The French court ordered Yahoo to destroy all Nazi-related materials stored
on its server. It also asked the company to ensure that no one in France
could access such material through its web site. Yahoo¹s subsidiary, Yahoo
France, complied. However, Yahoo did not make any changes to its U.S. web
site, and the French associations protested, saying French users could still
access the banned materials through Yahoo¹s U.S. site.
 
U.S. companies are not liable for third-party postings on their platform,
points out Mary Catherine Wirth, Yahoo¹s senior corporate counsel. If the
ruling goes against Yahoo, it would mean that U.S. Internet companies would
have to begin censoring their sites, which she says is unconstitutional. Ms.
Wirth, an adjunct professor at the University of California Hastings College
of the Law, says today¹s ruling means that U.S. companies know they have
some recourse on their home turf. 
 
If the final ruling goes against Yahoo, the company could be fined around
$13,300 per day for each day that it has been in violation of the French
law.
 
 

Yahoo declares small victory in dispute over Nazi memorabilia

RACHEL KONRAD
Associated Press
 

SAN JOSE, Calif. - Free speech activists and Yahoo Inc. declared a small
victory Thursday in a dispute over whether the e-commerce giant can peddle
Nazi memorabilia on its U.S. auction sites.

The 9th U.S. Circuit Court of Appeals said it would rehear some arguments in
a 5-year-old lawsuit against Yahoo by two French human rights groups, which
are trying to ban the sale of Nazi-related items on any Internet site
viewable in France.

France's Union of Jewish Students and the International Anti-Racism and
Anti-Semitism League sued Sunnyvale, Calif.-based Yahoo in 2000 and won a
French court order requiring the company to block Internet surfers in France
from auctions selling Nazi memorabilia. French law bars the display or sale
of racist material.

Yahoo stripped Nazi memorabilia - including flags emblazoned with swastikas
and excerpts from Adolf Hitler's "Mein Kampf" - from its French subsidiary,
yahoo.fr. But to the anger of French Jews, Holocaust survivors, their
descendants and other activists, Yahoo kept such items on its vastly more
popular site, yahoo.com.

Although that site is run on computer servers in California, it's accessible
to Web surfers anywhere in the world.

For failing to take down the offensive items, French courts began levying
fines on Yahoo of more than $13,000 per day starting in February 2001. Yahoo
theoretically owes more than $5 million today.

In 2002, Yahoo asked the U.S. District Court to rule that the French order
violated the U.S. Constitution's First Amendment, arguing that the fines
created a "chilling effect" for all Internet service providers.

District Court Judge Jeremy Fogel of San Jose ruled that if Yahoo wanted to
continue selling items on a site that could be accessed around the world,
the company had to assume the risk that it could violate laws of other
countries and was subject to more lawsuits. But in August, the Ninth Circuit
Court of Appeals reversed Fogel's decision, saying he had no authority to
hear the case.

The two-sentence ruling Thursday does not explain how the judges came to
their decision but forces both sides to argue their cases again in front of
an 11-judge panel, likely this spring.

The new opportunity for a courtroom victory, Yahoo executives said, could
benefit all Internet service providers and anyone who publishes content
online.

"If American companies have to worry that foreign judgments entered against
them might be enforceable, it could end up with companies censoring their
Web sites," said Mary Catherine Wirth, senior corporate council at Yahoo and
a professor at University of California Hastings College of The Law. "We
don't want that to happen."

Attorney Richard Jones, who represented the French organizations, called the
decision "meaningless" and said there's no reason to believe the new panel
would vindicate Yahoo.

"Whenever two parties go to court it opens the door for someone to lose,"
Jones said. "This is another step along the way. I don't think there should
be a different result, but we'll see."

Jeffrey Pryce, a lawyer specializing in Internet and international suits in
the Washington office of Steptoe & Johnson LLP, emphasized that decisions to
revisit cases are rare, suggesting that the new panel of judges may be
inclined to rule that Yahoo needn't comply with French laws on its U.S.
sites.

"It's unusual for a rehearing ... to be granted, so this is a significant
decision that could have profound effects for freedom of expression on the
Internet and for the ability to gain protection from the courts," Pryce
said.

FEBRUARY 11, 2005  |  CORPORATE     Print  |  Email
Reprint rights

9th Circuit Votes to Reconsider Yahoo's Battle With the French

By Peter Blumberg
Daily Journal Staff Writer
SAN FRANCISCO - Yahoo Inc. will get another chance to argue that it should be able to mount a home turf challenge against a French court's order forbidding auctions of Nazi memorabilia on the Internet.
On Thursday, the 9th U.S. Circuit Court of Appeals agreed to en banc reconsideration of its ruling in August refusing jurisdiction in U.S. courts over Yahoo's battle with two French groups that first sued the Internet portal in May 2000.
That case, brought in French court, ended with an order barring Yahoo's French subsidiary from providing access to Nazi items. The company also was subject to thousands of dollars in fines for not following French rules banning the sale of Nazi paraphernalia.
Yahoo sued in U.S. District Court in San Jose, seeking to have the French court's order declared unenforceable in the United States. Yahoo's lawyers argued that the French court's order violated Yahoo's First Amendment rights.
U.S. District Judge Jeremy Fogel sided with Yahoo on summary judgment, but a 9th Circuit panel voted 2-1 to reverse. The majority held that the French groups hadn't done anything to harm Yahoo to warrant involvement by U.S. courts.
The case now will go to an 11-judge panel, based on Thursday's decision by a majority of 22 active judges. Two judges, Harry Pregerson and Kim Wardlaw, recused themselves for undisclosed reasons.
The case has drawn a lot of attention in the cyberlaw community because of its implications for legal jurisdiction over commerce on the World Wide Web.
San Francisco's Electronic Frontier Foundation and the ACLU have provided amicus support to Yahoo.
The case is Yahoo Inc. v. La Ligue Contre Le Racisme et L'Antisemitisme, 01-17424.